Copper futures in New York settled near their session highs on Thursday, stabilising some after the market's unwillingness to extend the prior day's losses, sources said. "After the failed breakout in the middle of October, we have been sliding for two weeks straight, with copper stocks going up.
So what we saw was a crescendo of selling, and that was simply reversed off of an oversold situation yesterday afternoon," said a broker at a futures commission merchant in New York. Copper for December delivery ended up 5.05 cents at $3.2915 a lb on the New York Mercantile Exchange's Comex division, near the upper end of its day's range between $3.2450 and $3.30.
Floor dealers pegged initial resistance in December copper at the $3.40 level, with underlying support seen at $3.20, followed by $3.1450. Spot November climbed 5.35 cents to close at a session peak at $3.2840, while the rest of the board finished up 5.15 to 6.45 cents.
Comex final copper volume was estimated at 12,000 lots, against the 14,784 lots recorded on Wednesday. Another hefty increase in London Metal Exchange-monitored copper warehouse stocks on Thursday failed to ignite further selling, as talk of increased Chinese demand by year-end and lingering prospects of strike action at Chile's Codelco Norte division filtered through the trading floor, slightly lifting the market's already bruised sentiment.
LME inventories added 4,300 tonnes to 139,475 tonnes on Thursday, up more than 20 percent since mid-October, but still fewer than three days' worth of global consumption. Comex stocks fell 142 short tons to 23,102 tons on Wednesday.
The increased availability of material has recently removed the market's cash to futures premium to a discount for the first time in three years.
Analysts point to the fact that copper has recently been lagging behind the rest of the metals complex in terms of its post-June performance, with funds shifting money out of the market and into better-performing sectors.
"We have seen a lack of interest by the funds in the copper and we're seeing that interest coming back into the gold and silver, and most of the other base metals, but simply not in the copper," one said.
In economic news, a less-than-expected rise in new orders at US factories in September unnerved the Comex buying, prompting some light sales pressure, but as the market neared its lows, buyers moved in.
"Clearly there were some willing buyers that came in at around that $3.26 area," said one dealer. New orders at US factories rose a less-than-expected 2.1 percent in September as strength in durable goods, particularly transportation, more than offset weakness in nondurable items, a government report said on Thursday. On the fundamental front, unions representing some 6,000 workers at the largest division of Chilean state copper company Codelco have split their bargaining positions, with a minority opting for negotiations. LME three-month copper ended the final kerb up $95 at $7,245 a tonne.
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